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Banks would rightly collapse if people took their business to credit unions. No random violence required.
by kodyo 4y ago
Banks would rightly collapse if people took their business to credit unions. No random violence required.
- pksebben 4y agothe issue is that it's really, really hard to get that message out to everyone and have them understand the importance and the reasoning. to paraphrase Frank Herbert, it is the mark of a human that they will remain in the trap, that they can kill the hunter and thus remove a threat to their species.
- dimitrios1 4y agoCredit unions are all the rage when the economy is roaring, but they are typically the first to run into issues or fold on first sight of troubled waters. Their history is full of examples of having to be rescued by the federal government, including all the times commercial banks had to be rescued. The main difference in my view is struggling commercial banks get absorbed, where as struggling credit unions close. I am not sure which one is better, but I am wary of all the calls to go all in on credit unions. They've been available for almost a century now. They have a noble goal in that they've always tried to serve those in need, but I am not sure they are the solution.
- kodyo 4y agoI did a thought experiment. If FDIC and NCUA deposit insurance didn't exist, would I trust a bank of a credit union more with my deposits? I landed with credit unions due to the overt malfeasance of banks. The FDIC exists to keep banks afloat, because they're untrustworthy on their own.
- LastTrain 4y agoIf everyone moved their money to credit unions, they'd become just as bad as banks.
- kelseyfrog 4y agoI don't consider size to be the primary determiner of how banks operate re: good or bad. I consider the ownership model to primarily determine incentives and behavior. They are, of course, are not uncorrelated, but rather when attributing primary cause, I see credit unions incentives aligned with their clientele because they are one and the same. Whereas banks have a larger discrepancy between owners and customers.
- OkayPhysicist 4y agoA bank exists to serve the interests of their shareholders, a credit union exists to serve the interests of their members. Unless you happen to be a significant shareholder in your bank, credit unions are more aligned with your interests.
- willcipriano 4y agoAll things exist to serve the interests of itself.
- pwinnski 4y agoI don't think much of this is true. While corporate credit unions did participate in TARP[0], for example, that's not the common perception. Not only were they primarily corporate credit unions rather than consumer credit unions, far fewer of them participated in the program than banks: around 20% as many. For people, credit union accounts are federally insured just like bank accounts are, but credit unions are typically much more resilient than banks given the additional restrictions on how much leverage they can engage in. They close less often than banks, and also seem to be more likely to merge than close[1], contrary to your claim. You're welcome to keep banking elsewhere, but it's all credit unions for me and my extended family. 0. https://thefinancialbrand.com/news/bank-culture/tarp-on-credit-unions-3848/ https://thefinancialbrand.com/news/bank-culture/tarp-on-cred... 1. https://www.bankrate.com/banking/credit-unions/list-of-failed-credit-unions/ https://www.bankrate.com/banking/credit-unions/list-of-faile...
- dimitrios1 4y agoPerhaps I summarized incorrectly, I was getting most of that information from here https://ncua.gov/about-ncua/historical-timeline https://ncua.gov/about-ncua/historical-timeline (your linked sources are horrible sources just in case you were not aware: both are paid media fronts designed to drive revenue through clicks, not reliable sources)
- pwinnski 4y agoMy bad on the sources, I searched for links to support my memories, and didn't pay close attention.